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Should There Be an Email Tax?

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Back on April Fool’s Day, our friends to the south had quite the commotion arise around the purported inclusion of an email tax to their current tax code. While this article was nothing more than another digital gag on a day full of such fun and silly offerings, it did bring up quite an intriguing question – should email transmissions actually be taxed by legislative bodies around the world? To answer this question, let’s take a look at the original article, the industry response, and what would actually happen to brands like your own if emails – both marketed and personal – fell under the umbrella of taxation.

The Source of the Commotion

As part of her long line of fun April Fool’s Day posts, Kelly Phillips Erb of Forbes magazine tackled the faux subject of an email tax; something that undoubtedly strikes fear into the heart of any organization or individual that makes a living via inbox operations and outreach. Specifically, the article suggests that the U.S. Congress would be willing to repeal the Internet Tax Freedom Act (ITFA) and place a small transactional cost upon each message set to domains residing within the States. Naturally, governmental domains and similarly linked addresses would be exempt from the new tax, with the proceeds generated by this process going toward a renewed effort to pay down the U.S. budget deficit.

Gauging the Impact of an Email Tax

For the sake of fun and curiosity, let’s suspend our disbelief and spend a minute breaking down the math surrounding this kind of development. Assuming that this theoretical act would cause a domino effect here and abroad in response to the actions of the U.S. congress, the burden generated by even a minimal tax would be astronomical.

To prove this point, simply look at the raw number of messages sent every day. As Business 2 Community’s Lisa Cannon points out, this figure currently sits at about 122,500,453,020 messages sent – per hour. If the average tax burden on individual messages averaged out to around one cent globally, then governments around the world rack up over $1.2 billion in tax revenue per hour. Naturally, this is an astounding figure and far from an exact representation of what an email tax would shape up to be, but it helps illustrate the point very clearly – taxing what comes and goes from inboxes around the world is the very definition of big business.

Understanding the Industry Response

According to Chad White of Media Post, this scenario is scary, unrealistic, and entirely unnecessary due to the de facto email tax currently imposed on marketers and brands by consumers. While White’s tax doesn’t take on the form of a monetary burden, it represents the gap between the value of the viewer’s time and the value of the content held within the message in question.

Essentially, if you’re sending low-value, high filler content to your audience, it’s only a matter of time before the “consumer tax” – spam complaints, low open rates, and poor feedback – bankrupt your email operations. It might not be readily apparent, but under White’s understanding of the current inbox landscape, this self-taxation system helps ensure that spam offerings fall out of favor fast and email content continues to enhance and enrich the person on the other side of the screen.

Is This Something to Worry about?

At this point, it’s okay to take a step back and enjoy the idea of an email tax exactly as it was meant to be; a fun, industry joke. Sure, there’s always some outside chance that emails could eventually come under a specified tax system here or abroad, but that day isn’t even close to being on the horizon.

While the old days of the Internet “Wild West” might have benefited from such a system, the modern digital world offers much more incentive to avoid spamming consumers as part of the built-in inbox economy. Does spam still exist? Sure. But the number of illicit senders continues to plummet as more and more brands offer up relevant, value-driven offerings to email viewers. Adding in the continued push for net neutrality and a “free web” ideal doesn’t hurt either.

For now, you’re much better off worrying about avoiding White’s consumer-based tax by employing industry best practices and content tactics. This way, even if the absolutely unlikely happens and we see an email tax at some point far in the future, you’ll still have a huge impact in the inbox once you make your way through whatever minor tolls pop up.

About Victor Green

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